Home Downsizing Calculator

How the Home Downsizing Calculator Works

If you’re thinking about selling your home and buying a smaller one, this downsizing calculator can help you estimate the cash you might have left after the move. It calculates how the equity in your current home might reduce the payments on your new one, and even whether you might live mortgage-free.

Enter your current home value and remaining mortgage balance, then input the price of your downsized home and your planned down payment. The Home Downsizing Calculator will show rough estimates for:

• Your potential net proceeds from selling your current home
• Your approximate buying costs for the downsized home
• Your new loan amount if the down payment doesn’t cover the purchase
• Any remaining cash you may have after downsizing

Selling and buying costs are built in

To keep this calculator simple, it uses typical national averages for selling and buying costs:

• Selling costs: 8% (6% for combined Realtor fees and 2% closing costs)
• Buying costs: 3% for closing costs, inspections, and fees

The most important input to experiment with is your down payment percentage. The closer it is to 100%, the closer you are to eliminating your monthly mortgage payment.

Get a free home value estimate

If you’re unsure what your home is worth, use HomeLight’s free Home Value Estimator to get a quick ballpark figure before running your numbers. You can also check the prices of smaller homes in your buying area using our home search tool. Select a city or town and filter by square feet.

Note: Your exact costs will vary depending on location, home preparation and selling costs, buying and loan fees, and other factors like mortgage interest rates. Consult with real estate and loan professionals for more personalized estimates.

What Your Results Mean

Once you enter your information, you’ll see the three main outputs for proceeds, buying costs, and an estimate of how much cash you might still have after applying your down payment.

In today’s market, there are some equity-rich homeowners looking to downsize to a mortgage-free home and avoid today’s higher interest rates. Even if buying mortgage-free isn’t realistic, applying your sale proceeds can help you reduce your loan balance and your monthly payments.

Mortgage-Free Example Scenario

Let’s say your current home is worth $500,000, and you still owe $150,000 on your mortgage. You expect to spend about 8% in selling costs (agent commission and closing fees), which comes to roughly $40,000. That leaves you with about $310,000 in net proceeds.

If you buy a smaller home priced at $300,000 and make a 100% down payment, your total buying costs — including a typical 3% in fees — would be about $309,000. That means you’d have roughly $1,000 left over after downsizing — and no new mortgage.

If, instead, you decide to make a lower down payment on your new house, you might have a smaller mortgage balance and additional funds leftover. For many homeowners, this extra cash represents new freedom: it can help you retire more comfortably, travel, or make a major purchase like an RV.